AMD to acquire World Labs for US$8.2 billion in all-stock deal

Dr. Fei-Fei Li will join AMD as chief scientist, giving the chipmaker its own world-model research team as Nvidia moves further into models and open-source AI.

AMD has agreed to acquire World Labs, the San Francisco-based AI model and research lab founded by computer scientist Dr. Fei-Fei Li, in an all-stock deal valued at about US$8.2 billion.

The transaction is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions. Li will join AMD as executive vice president and chief scientist, reporting to chair and CEO Lisa Su. The World Labs team will continue to focus on AI model research after the deal closes.

AMD signed the merger agreement on Sept 26, according to a filing with the US Securities and Exchange Commission (SEC). The filing showed the number of shares AMD will issue has not been fixed yet. It will be worked out using AMD's volume-weighted average share price over 10 trading days ending two trading days before the closing date.

AMD plans to keep World Labs separate from its chipmaking business until the deal closes, CNBC reported. The outlet also said this is AMD's second-largest acquisition on record, after it paid about US$50 billion for Xilinx in 2022.

What the World Labs acquisition gives AMD

World Labs builds spatial-intelligence models that generate, reconstruct and simulate interactive 3D environments from text, image and video inputs. It also develops technology for robotic learning and simulation. Its first product, Marble, is marketed for creating entertainment content and for building simulated environments used to train robots.

AMD said World Labs' work on advanced models would show it how AI workloads are changing as the technology moves into robotics and physical AI, and that this would feed into its future technology roadmaps.

Su said the lab's research leadership and model expertise would help AMD develop its hardware, software and systems.

"Building the compute platforms for the next generation of AI requires a deep understanding of how models are evolving," she said in a statement.

Li said the deal would give her team the resources and engineering capacity to move its research forward faster.

“We’re extremely thrilled to be part of a shared journey towards the future we want to build together; where powerful AI platforms and systems are developed and deployed to help solve the most fundamental problems that humanity faces: from drug discovery, to unleashing human creativity; from transforming learning to unlocking the next generation of robotics,” she said in a post.

Already an investor

AMD was a World Labs shareholder before this week's announcement. It took part in the startup's US$1 billion funding round in February, which included a US$200 million investment from Autodesk and participation from Nvidia, Fidelity, and Emerson Collective. The two companies had also formed a partnership on inference optimisation and training last year, and Li appeared at AMD's CES presentation in January.

World Labs launched publicly in September 2024 with US$230 million funding at a US$1 billion valuation. It did not confirm its valuation after the February round, although earlier reports said it was seeking to raise at about US$5 billion.

Nvidia's head start in world models

The purchase gives AMD its own world-model research team at a time when Nvidia already has open-weight world models on the market through its Cosmos family. AMD has so far released only text and video models to the public.

Nvidia signed an agreement on September 2 to acquire open-source AI platform Hugging Face. According to its SEC filing, the deal consists of a purchase price of about US$11.9 billion payable to Hugging Face stockholders and an equity-based retention program of up to US$1 billion for employees who join Nvidia. It is expected to close in the first half of 2027.